White widow Bea Pullman (Claudette Colbert) and her daughter Jessie (Juanita Quigley as a toddler, Marilyn Knowlden as an eight-year-old) take in black housekeeper Delilah Johnson (Louise Beavers) and her daughter, light-complexioned Peola (Fredi Washington) exchanging room and board for work, even though Bea is struggling to make ends meet herself. Delilah and Peola quickly become like family to Jessie and Bea. They particularly enjoy Delilah's pancakes, made from a special family recipe.
When Bea is unable to make a living selling pancake syrup (as her husband had done), she comes up with the idea to open a pancake restaurant (using Delilah's recipe and labor) on the boardwalk, which proves to be very profitable. Later, at the suggestion of Elmer Smith (Ned Sparks), she sets up an even more successful pancake flour corporation, marketing Delilah as an Aunt Jemima-like figure.
As a result, Bea becomes a wealthy business woman, but all is not found to be well as the story advances fifteen years. Eighteen-year-old Jessie (Rochelle Hudson) falls in love with her mother's boyfriend, Steven Archer (Warren William), who is unaware at first of her affections. Meanwhile, Peola (Fredi Washington), ashamed of her African-American heritage, attempts to pass as white, breaking Delilah's heart.
Peola eventually runs away from home. While she is away, Delilah falls ill and dies. Delilah wished for a large, grand funeral, which Bea provides for her, complete with a marching band and a horse-drawn hearse. Just before the processional begins, a remorseful, crying Peola appears, begging her mother to forgive her. The film ends with Bea breaking her engagement with Steven because of the situation with Jessie.